Beef retail features aggressive leading up to Labor Day holiday week.

September 4, 2018

3 Min Read
FEEDSTUFFS MEAT PRICE OUTLOOK: Sept. 4, 2018
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Beef: Weekly retail feature data, as reported by the U.S. Department of Agriculture’s Agricultural Marketing Service, revealed an aggressive week-to-week increase on total beef features for the Labor Day holiday week. Total retail beef items included in ads were up 18% on the week but still were 1% below a year ago. Features of key grilling items were noted, with ribs, loins, briskets and grinds taking up a majority of the week's ad space. Ground beef features have been relatively lackluster throughout August, averaging 12% fewer weekly ads for the month, with the typical pre-Labor Day ramp-up on ad space absent this year. The light early-August ground beef ads led to Labor Day ground beef features rising 41% week to week. Seasonally, beef features are expected to remain firm throughout much of September and into October ahead of a setback in November. Rounds tend to hold decent ad volumes throughout mid-fall before giving way to rib features through the last week of November and into early December, then again over the Christmas holiday weeks.

Pork: The cash markets continued to experience pressure on pace with near-perfect seasonal declines. Spot cash hogs traded flat all last week, while the cutout did the same. This is normally good news if the cutout can establish a price bottom but this time of year, with seasonal demand shifting gears, it will be tough to forecast firmness in cash hog prices just yet. Harvest levels, as measured on a weekly basis, will be lower in absolute terms for last week and this week on account of the Labor Day weekend harvest level. With declining seasonal demand for pork expected and increasing availability of hogs, hog pricing has several more weeks of potential weakness. Although the spot cash hogs are in the mid-$30s, cash settlement hogs are not expected to fall below $40 in the next few weeks, and by that point, seasonal demand could be kicking into gear, especially given what packer margins will be by then.

Poultry: The latest USDA “Poultry Slaughter” report indicated that total estimated ready-to-cook (RTC) broiler meat production came up short of that expectation at just over 3.6 billion lb., which was slightly lower than the Informa Economics IEG projection of 3.7 billion lb. Average liveweights came in slightly lower than anticipated, at just 6.2 lb., as did the pace of broiler slaughter indicated by USDA at 36.7 million head per processing day. The drop in liveweights is in line with the typical seasonal variance that occurs as growers respond to incentives and higher temperatures hinder growth. RTC broiler production was up 7.5% during July compared with a year earlier; it followed a June RTC production total that was down 1.5% from a year earlier. For July, there was one fewer production day available to integrators. Accounting for this, RTC production per processing day was up 2.4% from the year prior and followed a 3.2% increase for June. IEG expects 2018 processing to be up 2.3% overall despite a slight drop expected for August.

For a more detailed look at the weekly forecasts for the various meat sectors and meat cuts, subscribe to the "Meat Price Outlook." Contact Susan Dahlgren at [email protected] for more information.

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